Analyst: Altcoins are about to have their “strongest rally” since 2017

Author: Biraajmaan Tamuly, CoinTelegraph; Compiler: Tao Zhu, Golden Finance

Summary

• The total market capitalization of altcoins (excluding ETH) increased by $126 billion in the second quarter, sparking speculation about the altcoin season.

The market capitalization of altcoins excluding Ethereum increased by $126 billion in the second quarter, sparking enthusiasm among analysts who have been looking forward to the altcoin season. Cryptocurrency analyst Javon Marks pointed out that This breakthrough may be comparable to the explosive bull market in 2017.

Marks highlighted a chart in his latest article for X that compares the TOTAL3 index (total altcoin market cap excluding Bitcoin and Ethereum) to the U.S. money supply, suggesting that altcoins could be on the verge of a major rally.

The rise in the TOTAL3 index relative to the U.S. money supply suggests that altcoins are appreciating relative to the total liquidity of the U.S. economy, reflecting increased investor interest and increased capital inflows into altcoins.

Marks highlighted that altcoins have recently rebounded from a key retest level after a breakout, saying: “Altcoins have rebounded from a breakout retest of the US money supply and could be on track for one of their strongest rallies since 2017!”

Similarly, anonymous crypto trader Moustache shared an analysis on X, highlighting the inverted head and shoulders pattern that appeared on the weekly TOTAL3 chart. The chart compares 2021 and 2025, reflecting the performance of altcoins in 2021, when the top altcoin surged 174% in the final stage, while Bitcoin rose only 20%. The pattern is a bullish reversal indicator, foreshadowing a rebound in the market, with analysts predicting "massive gains" for altcoins.

'Altcoin Season' Causes Swings in Analyst Sentiment

While some analysts are bullish on altcoins rising, others are cautious. Technical analyst Crypto Scient explains that the recent rise in altcoin market capitalization has not yet reflected a bullish trend shift on higher time frames (HTF). The analyst noted that TOTAL2 remains bearish after hitting the $1.25 trillion resistance level, saying:

"With both BTC and TOTAL close to resistance and TOTAL2 still having some room to run, I tend to think we are in the process of distribution."

Similarly, cryptocurrency commentator DonaXBT believes that a big breakout of Bitcoin's dominance trendline is crucial for altcoins to make big moves. The accompanying chart shows that Bitcoin's dominance has exceeded 60% and the weekly uptrend remains intact.

Bitcoin dominance. Source: Cointelegraph/TradingView

According to analysts, a break below the 60% level and a subsequent retest of the support area between 56% and 58% could serve as the initial catalyst for the emergence of a full-blown altcoin season.

Altcoin spot trading volume remains below $10 billion

CryptoQuant data shows that altcoin spot trading volume remains sluggish, with an average daily trading volume of $3 billion to $5 billion, compared with $8 billion to $12 billion in the fourth quarter of 2024, indicating that altcoins are in the early stages of a rebound. Despite the low trading volume, market observers believe that this is a precursor to a large increase in altcoins, indicating that altcoins have not yet reached peak momentum.

Bitcoin and altcoin spot trading volume. Source: CryptoQuant

Further supporting the idea that the market is in a Bitcoin season, as Blockchaincenter.net points out, the Altcoin Seasonality Index is currently at 24, which is further evidence that the market is in a Bitcoin season. Historically, an index below 25 has indicated Bitcoin dominance, but this could be a positive for altcoins. When the index climbs above 30-40, altcoins typically experience significant gains, driven primarily by a rotation out of Bitcoin.

Investor optimism for an altcoin rally is growing as trading volumes show early signs of recovery and the Altcoin Seasonality Index signals a turnaround in the market.